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A Bitcoin War Is Brewing Over KYC

Every year, Bitcoin faces a new foe intent on crippling it by undermining the foundations it was built upon. From mining cartels to developer disputes, Bitcoin has faced a barrage of threats over the past decade. When it’s not internecine conflict taking its toll, it’s external forces including politicians and regulators seeking to exert control. In 2020, the cryptosphere will face one of its toughest challenges yet as the KYC war heats up.

Also read: Utorg Exchange Grants Access to Traders With Limited Verification

The Battle Lines Have Been Drawn

This year, the Financial Action Task Force (FATF) issued strict new global standards for crypto assets. In 2020, the guidance will begin to come into force, while in January the EU’s Fifth Anti-Money Laundering Directive (AMLD5) kicks in. The upshot of this is more Know Your Customer (KYC) enforcement, stricter controls on buying and selling cryptocurrency, and increased compliance. Bad news for bitcoiners, in other words, who value their privacy.

The threat placed by the incoming legislation doesn’t just strip individuals of their right to anonymity, either – it also strips business owners of their livelihoods. Crypto payment service Bottle Pay, mining pool Simplecoin, and interactive bitcoin faucet Chopcoin have already been forced to shut down ahead of AMLD5. As news.Bitcoin.com reported:

Providers of crypto-related services, such as exchanges and custodial wallets, are considered “obliged entities” and will have to comply with the union’s AML regulations in the future. That means abiding by the rules applicable to other financial institutions including the obligation to perform customer due diligence and submit suspicious activity reports. That also applies to investment firms, tax advisors, accountants, notaries, and lawyers who transfer or receive payments equivalent to €10,000 and more.